AIG exec resigns with a bang
If you'd like to "meet" one of the AIG executives caught up in the bonus firestorm, you should read this resignation letter obtained by the New York Times. Jake DeSantis, a VP in the financial products unit, sent the letter yesterday to AIG's CEO Edward Liddy. The two have never met.
DeSantis explains his decision to quit this way:
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in -- or responsible for -- the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage...
I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.
DeSantis says he received a bonus payment on March 16 of $742,006.40, after taxes. He says he will donate every penny of the money to "organizations that are helping people who are suffering from the global downturn." Of course, his donation could be a whole lot less if the government taxes it further at a 90% rate. DeSantis says he doesn't want the money to go back to the "obscurity of A.I.G.'s or the federal government's budget:"
As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.
People like DeSantis have every right to be bitter. It's not fair. But hardly anything about this financial disaster is fair. There are many, many hardworking people who've lost their pay through no fault of their own. The difference here is that there was a contract, a contract that was in place when the government gave AIG its first bailout installment months ago. There is no reason it had to come to this. Something could've been worked out.
Of course, the only reason these bonus payments were even paid is because the taxpayers bailed out AIG. DeSantis probably wouldn't have gotten a cent otherwise. Plenty of companies have gone down because of similar flaws -- poor leadership, a few rogue employees, excessive greed, sometimes criminal activity or bordering on criminal. Most of the people who worked for those companies wound up getting royally screwed personally and professionally, despite having nothing to do with the downfall. And the government wasn't there to save them.
Companies like Enron.